“Gas-to-Energy Agreement cannot be released now” – Natural Resources Min. tells Parliament

Dec 04, 2022 News

Kaieteur News – Though the Government of Guyana and United States (U.S.) oil giant ExxonMobil have inked an agreement for the massive Gas-to-Energy project being developed, the agreement cannot be made public just yet.

Minister of Natural Resources Vickram Bharrat in a written response to Opposition Member of Parliament (MP), David Patterson, on Wednesday explained that the agreement outlines the principles and conditions for the commercial and technical aspects of the project.

“Mr. Speaker, the Government of Guyana has signed a Heads of Agreement (HOA) with the Stabroek Co-ventures 30th June 2022. This agreement sets out the principles and conditions for the commercial and technical arrangements of the Gas-to-Energy Project,” Bharrat said.

Patterson in his request for the information, submitted to Parliament on October 18, 2022, had asked whether any agreements were signed with Esso Exploration and Production Guyana Limited (EEPGL) in connection with the Wales project and if yes, for the Minister to supply the House with a copy of the said agreement.

Natural Resources Minister, Vickram Bharrat

However, Bharrat in his response to Patterson said, “There are other agreements on supply, buyer’s agreement, field development, licensing conditions, onshore works, and land matters that are currently being drafted. The respective agreements and policy documents will be presented to this Honourable House when they have been agreed upon and executed. All agreements are being done in a timely manner to meet the Final Investment Decision which will allow for the project to be completed by our committed deadline of December 2024.”

Efforts to contact Patterson on Saturday were futile.

Since the inception of this US$2B project, the entire agreement has been shrouded in secrecy. When the Heads of Agreement was signed, the press was invited but were not allowed to ask questions. There has been no press conference on the mega project too, even though there is no updated feasibility study proving the viability of the project.

Government said the venture will lower electricity costs by 50 percent, however independent analysts have said this may not be possible due to the increased price tag of the project.

The Wales GTE project entails three components inclusive of the pipeline, a Natural Gas Liquids (NGL) facility to treat and separate the gas and a power plant to generate 300 megawatts of electricity. Exxon’s pipeline so far is expected to cost US$1.3 billion, while Government anticipates the other two aspects would cost an additional US$700 million.

On November 25, the oil company received the blessing from the Environmental Protection Agency (EPA) to commence work on the project. In the meantime, it was reported that government will likely be issued with the requisite environmental approvals in another few weeks’ time.

In September, members of civil society told Kaieteur News that the agreements for the project ought to be made public even before Government attaches its signature. Economist Ramon Gaskin, Transparency Activist, Dr. Yog Mahadeo and Attorney-at-Law, Elizabeth Deane-Hughes all insisted that mistakes made in the 2016 oil contract must not be repeated in the gas deal with Exxon.

Government, however, remains adamant against the release of such critical deals.